Interest rates are at their mathematically lowest possible - near zero. That means they cannot go down unless the market crashes and we get deflation. They can only stay the same or rise. Also, they have been propping up the market by buying stuff, keeping interest rates artificially high.
When interest rates rise, fixed rate instruments (e.g., bonds) go down in price, because people want the higher interest rate.
The problem - EVERYONE knows this, and they also know that everyone else knows this, AND they know that everyone doesn't want to be the last man holding the stick. BUT, no one knows WHEN rates will rise - just that SOMEDAY they will. But there's few places to put money, EXCEPT for the market, so everyone invests and watches the fed carefully so they can pull out immediately.
So the fed announces "maybe, someday" things might change, and everyone freaks, trying to sell before everyone else, so the market drops.
And this affects the stock market too, both for dividend stocks and other stocks. When interest rates rise, the whole economy slows, their borrowing costs more, etc.
After awhile, everyone figures 'hey, maybe the worst is over, this isn't so bad', etc. Besides, being invested is better than fed funds rate (0.125%), so 'why not'?
Like rats on a ship, running from one thing to the next.
No, I don't follow analysts, although I've always been fond of Value Line (the old tried and true investment method - volume plus direction). They give you some good information about sectors and individual stocks.
I belong to www.AAII.org and I've wanted to investigate betterinvesting.org, - same thing as AAII, but I never have the time.
I'm not sure that any analyst would do much good these days. The computerized hedge funds are something like 90% of the market now. You might consider ETFs - AAII has a computerized investing newsletter, and the current issue features etfdb.com, xtf.com, etftrends.com. Some research has shown that the extra return in a managed account does not compensate for the percentage taken out by the manager - thus ETFs sometimes provide a better return.
The main thing I think about is - the overall market - where I think we are going over the next 2-3 years, and who seems to run a good company, based on my experience with them. There's too much noise in the market to take a short term view. I cannot see anything else for the economy but to continue what it has done for the last 4 years - slow rise, barely rising, whatever you want to call it. So, if there is a sell-off, you might want to consider buying, because the market is more likely than not to plug along. OTOH, if interest rates do rise, both stocks and bonds will go down, bonds for good, and stocks for the short term.
I was mostly out for the crash of '08, and a good portion I put into Google, because I seems well run and has morals. Search is a cash cow that's going to last for at least a decade, and they seem to make good investments in other tech.
I'm on an investment committee for a psychology association. Most of the monies are invested in fixed income because they think that's low risk. I try to tell them there isn't any such thing as 'low risk', because there are many different kinds of risk, and fixed income investments have risks that other investments do not, such as a depreciation risk that will come to pass when interest rates rise. There's an even chance they can lose half their funds. They've also got a small amount in a gold mining company, for 2 years now. Gold is supposedly a contrarian investment - when the market goes down, as during a recession, precious metals like gold go up. But it doesn't always.
Well, the recession is over,and gold has had an extraordinary runup over the last 8 years. Based on psychology and return to the mean, I don't think gold will continue to run
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